Tuesday, November 11, 2008

Inflation as a Tool of War

The prevailing economic thinking that drives policy among the nations of the world, particularly the industrialized nations, is Keynesianism. Perhaps a few of Keynes own words would be instructive.

Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some… Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.

The Economic Consequences of the Peace, John Maynard Keynes, 1919

Lew Rockwell explains how the Fed enables war and destruction of liberty. War and Inflation is an excellent article.

War and Inflation by Llewellyn H. Rockwell, Jr.

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